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No-poach and wage-fixing agreements: Australia's proposed new cartel offences

Michael Corrigan, Nina Batra
24 Sep 2026
7 minutes

The Australian Government has released exposure draft legislation that would, for the first time, classify no-poach and wage-fixing agreements between employers as cartel conduct under the Competition and Consumer Act 2010.

Key takeaways

  • New cartel category for labour markets - The draft Bill would create a new kind of cartel provision targeting conduct between parties that employ staff, prohibiting "no-poach" and "wage-fixing" agreements.

  • Broad scope of prohibited conduct - The proposed no-poach provision captures agreements that directly or indirectly prevent recruiting, soliciting or hiring another party's current, former or future staff. The wage-fixing provisions cover agreements between employers to maintain, decrease or control pay or employment terms and conditions.

  • Independent contractors are not covered - The new provisions apply only to employees, as similar arrangements affecting contractors are generally considered already in the scope of the CCA.

  • Application of cartel law to non-competitor arrangements - The Bill is not limited to arrangements between competitors, and as a result, would significantly expand the reach of the cartel provisions, which to date have been critically premised on arrangements between competing businesses.

  • Franchisees may be targets for these new restrictions - Restrictions on movement of staff between franchise outlets have been called out by the Assistant Minister for Competition.

  • Sale of business restrictions unaffected - The Bill would not affect or remove the existing carve-out which permits no-poach restrictions agreed by a seller of a business which are solely for the protection of the buyer in respect of the goodwill of the business.

  • Targeted exemptions are proposed - The draft Bill has carve-outs for various arrangements, including joint ventures and labour hire.

  • Both civil and criminal penalties would apply - Consistent with the existing cartel provisions, the proposed no-poach and wage-fixing prohibitions would carry both civil and criminal consequences.

Background

On 7 September 2026, the Australian Government released exposure draft legislation to make most no-poach and wage-fixing agreements between employers unlawful, classifying them as a new form of cartel provision.

The Competition and Fair Work Legislation Amendment (Banning Unfair Non-Competes) Bill 2026 (the draft Bill) proposes notable reforms to the Competition and Consumer Act 2010 (CCA) and the Fair Work Act 2009 (FW Act).

The Government's stated basis for the reforms is that no-poach and wage-fixing agreements are analogous to other forms of cartel conduct. In Australia, cartel conduct has traditionally not applied to interfirm agreements concerning each firm's employment relationships because labour markets are treated outside commercial markets for goods and services.

In a recent media release, the Assistant Minister for Productivity, Competition, Charities and Treasury, Dr Andrew Leigh MP, also called out no-poach clauses in franchise agreements of fast-food companies as an example of the conduct targeted by the reforms.

Proposed CCA reforms

The draft Bill proposes to amend the CCA to explicitly prohibit two forms of restrictive conduct in labour markets: no-poach agreements and wage-fixing agreements. These would be implemented by expanding the existing cartel framework in Part IV of the CCA, as a new "kind" of cartel provision relating not to competitors but to "conduct between parties that employ staff".[1] 

Independent contractors are not covered because arrangements between competing organisations concerning the terms on which they engage contractors are considered already captured by existing Part IV cartel provisions.

In short:

  • A no-poach provision is a provision of a contract, arrangement or understanding between parties that has the purpose, effect or likely effect of directly or indirectly preventing a party from recruiting, soliciting or hiring another party's current, former or future staff, or imposing a notification or other requirement before a party can engage in the recruitment, solicitation or hiring of the other party's staff.

  • An example would be a commercial supply, services or consultancy agreement where the client would be asked to agree not to make an offer to employ the staff or consultants working on the client's project. A limited exception will allow some restrictions on poaching secondees to be agreed for a limited period.

  • A wage-fixing provision has the purpose, effect or likely effect of directly or indirectly fixing, maintaining, decreasing or controlling remuneration, or terms and conditions of employment, of the current or future staff of two or more parties.

  • An example would be arrangements between various employers to limit wage increases or to withhold certain allowances or other employment benefits, whether related to remuneration or leave. For example, an arrangement that employers would limit the offer of paid parental leave to secondary carers, such as to one month, would be illegal.

  • An agreement containing a no-poach or wage-fixing provision will be assessed as a whole to determine the purpose or likely effect of the relevant cartel provision. However, unilateral conduct without collusion (such as an employer independently deciding not to hire from a competitor) would not constitute a no-poach agreement.

Proposed targeted exemptions

The draft Bill recognises that certain no-poach or wage-fixing agreements may serve the public interest and lead to more economically beneficial outcomes. To address this, it proposes targeted exemptions:[2] 

Exemption
Key conditions

Joint ventures

  • Provision must be reasonably necessary for undertaking the JV

  • JV must be for production/supply/acquisition of goods or services

  • JV must not be for the purpose of substantially lessening competition

  • Any prescribed transparency requirements must be met

  • JV must be carried on jointly by the parties or by a body corporate they formed

  • Must apply only during staff's involvement with JV, but no-poach may end 3 months after they cease involvement.

Secondments

  • Provision must relate only to secondments between the parties

  • Provision must be reasonably necessary to enable the secondment

  • Secondment must not be for the purpose of substantially lessening competition

  • Any prescribed transparency requirements must be met 

  • No-poach may end 3 months after secondment ends

Labour hire

  • Provision must relate only to labour hire of staff to one or more of the other parties

  • Provision must be reasonably necessary to enable the labour hire

  • Labour hire must not be for the purpose of substantially lessening competition

  • Any transparency requirements must be met

  • No-poach may end 3 months after placement ends

Professional sporting leagues

  • Provision must relate to player selection or salary capping

  • Provision must be reasonably necessary to enable player selection

  • Any transparency requirements must be met

FW Act processes

  • The exemption applies if the cartel provision relates to remuneration, conditions of employment, hours of work or working conditions that are permitted or approved under the FW Act (for example, enterprise bargaining and protected industrial action)

State/Territory industrial law

  • The exemption applies if the cartel provision relates to remuneration, conditions of employment, hours of work or working conditions that are permitted or approved under the relevant State or Territory law

Government wage-setting

  • An exemption where all parties are government entities (Commonwealth, States, Territories or their authorities)

Minimum labour standards

  • The provision is exempted if it gives effect to a requirement imposed by a specified code or other document

Related bodies corporate

  • The provisions of an agreement between two related body corporates is not captured

What does this mean for your business?

These changes could be very significant if adopted in this form and would impose a substantial regulatory challenge to ensure compliance.

Should the reforms progress, businesses would need to review their existing contractual arrangements, including joint venture and secondment agreements, and labour hire arrangements, and any informal understandings they have – for provisions that could constitute no-poach or wage-fixing cartel provisions.

Franchisors and franchisees in particular should scrutinise their franchise agreements for any provisions that restrict the movement of staff between franchised outlets.

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[1] Proposed new section 45ADA Back to article

[2] See paragraph [1.29] of the explanatory materials Back to article

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.